NEWS REPRINT
reprint from Marina Dock Age Magazine, April 2002
by Ryan Schulz
Megayachts Make Big Waves
in Ft. Lauderdale
Catering to the yachts and crews makes economic sense, as long as there are enough slips to go around.
At some point, the definition of "boater" evolves from one who pursues a recreational activity, to a lifestyle, to a full-blown life change. When a boater's pride reaches the 80-foot mark, he becomes a megayachter.
In recent years, the production of megayachts has increased at a clip that is outpacing the availability of dockage long enough or water deep enough to accommodate these nautical behemoths. Megayachts usually require at least 12 feet of water and hundreds of feet of dockage. This isn't a market for a typical mom-and-pop operation that happens to have access to the open sea.
To complicate the situation, many of these megayachters aren't just looking for a simple seawall to tie up to. A full-service boat yard has to be in the vicinity. And the owners and crew are usually expecting world-class dockside amenities. So, the quest for megayacht dockage is on, and there is one port in the U.S. that has it all.
The draw to Ft. Lauderdale
For years big-boat boaters have been drawn to the southeastern portion of the United States, especially southern Florida, for a multitude of reasons, including the long boating season which begins in mid-October and ends in mid-April. Ft. Lauderdale in particular has profited from megayachting because, in part, it was developed for it.
Lauderdale Marina, one of Ft. Lauderdale's first megayacht marinas, was a direct result of a man owning a big boat with no place to put it. In 1948, Bob Cox was looking for a deep-draft area in southeastern Ft. Lauderdale for his sailboat. After making friends with servicemen controlling a former torpedo-testing facility, Cox arranged for the purchase of the land and built Lauderdale Marina.
Lauderdale Marina serves 15 to 20 megayachts, depending on configuration, ranging in size from 80 to 200 feet. "We find that many of the vessels use our marina as a jumping off point," says Ted Drum, property manager for Lauderdale Marina. "Since megayachts require a crew, owners usually tell the captain that they will meet them at our facility before launching for a lengthy cruise."
Rates vary depending on the vessel's arrangement with the marina. If they have a long-term agreement, rates range between $1.25 and $1.50 per foot. Short-term customers are charged $2 to $3 per foot, which is slightly below average for this type of marina - others charge as much as $3.50 a foot.
An issue of privacy
As you might expect, when you are dealing with a 100-foot boat that might cost $3 to $6 million or a 200-foot boat for $40 to $45 million security and privacy are a high priority. Of course, each vessel, whether the owner is there or not, has a built in security system on board - the crew. In addition to that, marinas provide high-tech systems. Drum is confidant that the non-human security system at Lauderdale Marina is "as sophisticated as any you'll find." It involves cameras that cover every inch of the facility's 4.5 acres of land and water. The videotape also serves other purposes: "When someone says they lost a boat tie during the night, we go to the tape. We find the camera that covered the location where the piece of equipment was last seen, then fast forward to see if somebody took it or how it may have disappeared," says Drum. "It's helped us out numerous times."
Making the most of space
Security isn't the most critical problem facing Ft. Lauderdale, and other mega-yacht locations, these days, though. Dockage is. Since space is limited, even a facility that has constant access to deep water, like Best Western Marina Inn and Yacht Harbor, can only accommodate about 20 megayachts.
The Best Western is located just inside Port Everglades, with access to sections of the seawall and port wall. Because of its location, the facility can handle the biggest boats without having to rely on high tides or dredging. Best Western averages 12 to 15 feet of water. "On the outer seawall, it gets much deeper, too," says Tim Nipple, the facility's general manager. "We have a Ft. Lauderdale exclusive with our deep water. If they want deep water someplace else, they have to go to Jacksonville, Savannah, or the Keys."
Tim runs the whole show by himself. Since the boats are like "floating cities," they virtually take care of themselves. His job is to organize the boats as they come in, and plan to allow for the most usable feet of dockage as possible. All dockage is parallel, as is the case with most megayacht marinas. Once the boats are docked, Tim reviews the dockage agreement and waivers, then moves on to the next boat.
When the marina first opened, it had docks that were capable of handling 30 to 40 feet, 70 to 80 feet, and 100-foot boats. As it came clear that there was a growing and lucrative market in catering to megayachts, the floating docks were removed. Today, there are four stationary docks. The outer wall, inside outer wall, and the seawall each have 400 feet of dockage, and then there is the canal which has 325 feet. The canal is used for smaller boats with drafts of 5 feet or less.
From the water up
Unlike Best Western, a marina that wisely saw a profitable opportunity and is making the most of it, Sunrise Harbor Marina was specifically designed to be a megayacht marina. The property connected to the marina is part of the key to the marina's booming success. The marina was designed around the premise that when you cater to the crew, you attract the yachts and their owners. Richard Graves, marina manager, says, "Lots of places treat the crew like second-class citizens. We realized that the boat is going to go where the crew wants to go." Sunrise Harbor has 2,500 feet of linear dockage, and is attached to a luxury apartment building with 352 units. The crew of each boat is given free reign of all of the facilities, which include a billiard room, a library, and a pool and sauna.
A daily transient can expect to pay $3.50 a foot per day. A monthly contract reduces the rate to $3.00 a foot per day, and a seasonal contract brings the rate to $2.50 per foot per day.
The marina offers free trash pickup, three phone lines to each boat, free local calls, cable, and electricity without a markup. Graves says, "Our rates are set so that we can absorb those costs. When you multiply it, there's no reason to nickel and dime someone to death. If you are good to them, they'll come back, and they'll tell people they know about you. Nearly 80 percent of the boats in my marina right now are a direct result of referrals."
Graves is adamant about the fact that the captains and crews of the ships are the people to attract. Megayacht marinas aren't trying to reach hundreds of thousands of people. "There are only about 4,000 to 5,000 of these boats worldwide," says Graves. "These captains are asset managers. Some of them have budgets of a million dollars. Most of them make more than $100,000 a year. Owners rely heavily on their judgment and expertise, and we strive to take care of every aspect of the mega-yachter's needs. That includes the crew."
A port in almost any storm
Being inside the port has its drawbacks, too. "Port Everglades is the logical place for the big boats," says Jim Gilbert, editor-in-chief for ShowBoats International, a magazine for megayachters. "However, you have to remember that the port is a county-managed resource. The politics are strange." Commercial shipping and cruise ship interests are often pitted against megayachters for water. According to Gilbert, the two are set to clash over space.
"Everybody in South Florida thinks tourism is the saving grace of the economy. What they don't realize is that private boating creates as much, if not more, locally generated revenue."
Gilbert explains that creating infrastructure for megayacht dockage costs far less than installing, for example, a baseball stadium or theme park. What's more, it takes up far less space. "The only real investment, besides providing a little dockage, some water and power and phone lines, comes from the private sector. Restaurants, retail stores, and repair facilities take the brunt of the responsibility to provide a place for these people to spend money. For the most part, they are already there."
Kelly Drum owns BoatStation.com, a popular web portal for boaters and megayachters looking for slip space. He says that a boat coming in for a short-term dockage could require as much as $250,000 or $300,000 in goods and services. A simple fuel bill for one of these vessels could cost as much as $100,000 per month, and a paint job can cost several hundred thousand. "This area has a huge service potential, and sometimes people don't realize the full scope of it," says Drum.
Bigger and bigger
Demand for these big boats keeps on growing. Gilbert says that in 2001 there were 428 megayachts scheduled for completion. That was up from 327 boats in 2000. In 2002, there are 507 boats scheduled for completion. On average, says Gilbert, the mega-yacht industry grows 20 percent each year. "The city is more responsive today than it was five years ago, but there is still a shortage of slip space," says Gilbert, "especially when it comes to boats over 170 feet." With that kind of growth, there aren't many places with deep enough water to handle the volume of traffic, as well as the crew and owner's personal requirements.
Many of these yachters don't even live in the states. "Most of them live in Europe," says Gilbert, but the crew knows where they want to be. "The crew is going to be where it's best for them. They would like to be in Ft. Lauderdale. All their provisioning and outfitting can be finished here."
That's what makes Ft. Lauderdale unique. Not only can a captain get a new propeller made or repaired, but he can find the owner's favorite wine, too. And he can usually find it all very close by.
A MASTER PLAN FOR MEGAYACHTS
Business and government leaders in Ft. Lauderdale are not standing idly by as precious marina access is co-opted by non-water-dependent real estate ventures. They have banded together under the aegis of the Marine Industries Association of South Florida (MIASF) to publish a Master Plan to guide stakeholders in their effort to maintain and increase marine industry development.
MIASF Executive Director Frank Herhold shared with us the executive summary of the Plan. It says that the growth of the megayacht sector is the "single most economically significant trend" in the yachting industry. There are more than 4,000 vessels worldwide, 20 percent of which travel through southern Florida each year. "There is growing concern that if Broward County does not continue to develop new and expanded dockage and repair facilities, it will decline as a premier location for megayachts and other boats."
The Plan emphasizes the economic importance of the 825 marine industry facilities in Broward County, which surpasses all other counties in Florida in marine industry gross revenue. The marine industry generated $8.8 billion in total economic output in 2000, providing $3 billion in wages and earnings. The 109,820 full-time jobs provided by the industry make it among Broward County's largest employment sectors.
The Marine Master Plan Steering Committee includes representatives from country planning commissions, the chamber of commerce, marinas, marine manufacturers, Sea Grant, and other interested parties.
The Plan recommends working with government agencies, particularly planning departments, to take advantage of opportunities already in place. These include financial assistance, tax benefits, zoning priority for marine-dependent uses, and environmental strategies. The Plan presents a methodology to identify potential sites for development of new marine facilities and also mentions the critical need for trained marine technicians in local boat yards.
MIASF received assistance preparing the Plan from the Joint Center for Environmental and Urban Problems at Florida Atlantic University, the Urban Harbors Institute of the University of Massachusetts Boston, and the Center for Visual Planning Technology at Florida Atlantic University.
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